The fight gets underway

Week 1 analysis

IN A JURY TRIAL WITH QUALITY LAWYERS — and Musk v. Altman has them by the boatload — you can expect that every party will hone the story they want the jury to absorb into something so clear, simple and punchy that it amounts to a tagline, one that conveys the central idea of their case. One week into the trial, these taglines have emerged from the main parties, and they provide a good place to start.

The plaintiff: Elon Musk

The trial this week was all Elon Musk — there were only three days of testimony and Musk’s direct, cross, redirect and recross examinations spanned all three. The jury heard his tagline dozens of times, first in the opening statement of his lawyer Steven Molo, and then repeatedly from Musk as he testified. The tagline?

“It’s not okay to steal a charity.”

The phrase slickly embodies his core contention. Musk alleges that, together with Sam Altman, Greg Brockman and Ilya Sutskever, he formed a nonprofit corporation with several defining characteristics. The new organization was chartered with a mission to develop artificial intelligence for the benefit of humanity and not for the private financial gain of any individual. In addition, the nonprofit would, to the greatest extent possible, make the technology open source, so the benefits of artificial intelligence would be widely shared. Reflecting that, Musk said he named it OpenAI.

All the founders signed on to that concept and to those ground rules, and based on that, Musk made donations that totaled $38 million in cash. He also provided other invaluable support, lending his name and influence to the endeavor, recruiting top engineering talent, and tutoring Altman and Brockman on how to build a business.

The new organization made great progress, but as time wore on, Musk says Altman and Brockman betrayed the founding principles, turning the charity into a commercial enterprise in order to enrich themselves and others. In Musk’s view, they “stole the charity.” He contends that they are violating the law that governs nonprofit corporations. His lawsuit, he says, is to stop it.

The defendants: Altman, Brockman, and OpenAI

OpenAI’s tagline was unveiled by William Savitt, lead counsel for the various OpenAI companies that have been named defendants as well as Altman and Brockman. Savitt has history with Musk; he was counsel for Twitter in 2022 when Musk tried to back away from his purchase of the company. (Musk ultimately purchased the company at full price.)

In Savitt’s opening statement, he spoke about Musk far more than about his client Sam Altman, signaling that the defendants’ focus in the case was going to be on Musk. The physical arrangement of the trial teams in the courtroom supported that idea. Musk sat at plaintiffs’ counsel table directly facing the jury. Altman sat on a row of bench seats behind the defendants’ counsel, the second person in the row and as unobtrusive as one could be in that setting.

Savitt is short, intense and deeply focused, but when talking to the jury, the court and witnesses, he exhibits a relentless politeness that at times approaches over-solicitousness. He began his opening expressing gratitude to the jurors, acknowledging their sacrifices to serve, the value they provided and his deep appreciation. After that, it was all about Musk. On that topic, he was in full attack mode.

He told the jury that the story Musk would paint in his testimony was based on made-up or imagined facts. He told the jury — assured and promised the jury — that by the time the dust settles, they will see that the pillars supporting Musk’s story are false and that Musk’s vaunted concern for humanity is an illusion. His tagline?

“It’s not about humanity; it’s all about Musk.”

Savitt took the same approach when he cross-examined Musk, relentlessly attempting to contradict Musk’s contentions with deposition testimony, tweets, emails and other evidence to show that what really drove Musk was not the lofty principles he espoused in his testimony, but the most familiar of human traits: jealousy, anger and an overpowering need to be in control.

For Microsoft

As a reminder, Microsoft is a named defendant in this case, as Musk alleges the company aided and abetted the breach of charitable trust. Russell Cohen, Microsoft’s lead counsel, is strategic. He has mastered the most difficult lawyering skill: knowing when to stop talking and sit down.

In addressing the jury, the first thing he said after the pleasantries was that he knew there was great interest in the fight between Musk and Altman over OpenAI’s mission, but Microsoft came to the table long after OpenAI’s corporate structure had been established.

It’s hard to cast one of the country’s largest and most valuable companies as a bit player, but Cohen did the next best thing. Microsoft was the dull, careful adult in the room; Cohen said the company did its due diligence, made investments for proper purposes and devoted itself to finding a win-win scenario where it and its customer both benefited through collaboration.

It’s tagline:

“We dotted the I’s and crossed the T’s.”

Cohen was strategic as well as brief in his cross examination of Musk, homing in on one issue that could be his client’s get-out-of-jail-free card: whether Musk’s lawsuit had been brought in time. The statute of limitations issue isn’t unique to Microsoft, but because of different factual circumstances, the company may have a better argument than other defendants.

Musk sued Altman and the others in August of 2024; he didn’t sue Microsoft until November of that year. Microsoft argues that the limitations period on the aiding and abetting claim — the only claim made against it — is a 3-year period. Should that be true, and if Musk either knew or should have known that he had a claim against Microsoft before November of 2021, Microsoft could get a clean win — and that would be a big deal.

Even though most of the focus has been on OpenAI, Microsoft has an enormous stake in the trial. Musk has asked for Microsoft to cough up as much as $25 billion in “wrongful gains” and has also asked the court to unwind a recapitalization that made it OpenAI’s largest shareholder — with a stake that was valued at $138 billion at a time when OpenAI was thought to have a value of $500 million. (OpenAI has more recently been valued at $850 billion, at least according to the business press.)

Cohen’s cross had one goal; he wanted Musk to own a tweet that he posted in September of 2020 — well outside of the limitations period — that said Microsoft had “captured” OpenAI. When Musk said that he posted the tweet and at the time thought it true, Cohen got much of what he wanted and sat down. (Musk testified that he was reassured by Altman after the tweet that OpenAI remained “on mission.”)

How are they doing?

Big commercial trials tend to have long, boring stretches where nothing much seems to be happening, punctuated by moments that seem revelatory. It can be easy to think that nothing important is going on in those stretches. But the lawyers are working hard to establish every fact needed for their claim while also pounding away at the other side in the hope of casting doubt.

Viewed that way, the week was generally good for Musk. He presented his claim with conviction, avoided a major meltdown on cross examination and did not back down from his core contentions. Savitt — an accomplished trial lawyer — battered him with questions that sought to make him look like he was fabricating his current story. Musk got testy at moments, and in a number of areas Savitt scored points, but there were no knockout blows.

Savitt also pursued less dramatic goals. There are a number of factual areas that will be of importance to Savitt and his team over the full stretch of the case. OpenAI, like Microsoft, also has a statute of limitations defense that could allow it to walk away with a verdict for the defense. OpenAI’s defense is harder than Microsoft’s, but it also turns on establishing when Musk knew or should have known that he had a claim against OpenAI.

In his testimony, Musk showed that he was very aware of that issue. He described his relationship with, and views of, Altman and Brockman in three phases. In the first stage — roughly from 2015 to 2017/18 — he said he had a good relationship with and positive views of the defendants. In the final stage, beginning in early 2023, he concluded that the defendants had “stolen the charity.”

During the middle period, Musk said he began to feel uneasy with his co-founders and develop a suspicion that the defendants were considering stealing the charity. He said that at times along the way his suspicions were addressed, and he never knew enough to conclude that the charity had been stolen. He was merely wary.

This middle period of unease is factually tricky and full of nuance. The period extends forward past the date when the statute is a problem, so Musk wants to make clear that in the period he did not know enough to know he had a claim.

On the other hand, in order to explain why he took actions during that period that are arguably contrary to OpenAI’s interests, he also wants to be clear that he had suspicions about what the defendants were up to.

It is a delicate dance. If Musk was too suspicious, perhaps he knew enough to sue. If he was not suspicious enough, then why did he do things he did — like cutting off quarterly donations to OpenAI.

In a careful and controlled manner, Savitt did his best to exploit the opportunity that the delicate construct presented him. He also banked useful points that will likely reappear as the case proceeds.

There were stretches where Savitt was clearly frustrated with Musk’s penchant for delivering long responses to yes or no questions. When a witness can be kept to a yes or no, a good trial lawyer can build up momentum on cross that can lead to witness errors and/or admissions. For the most part, Musk didn’t allow Savitt to achieve that momentum.

As described above, Microsoft’s Cohen did a good job of following its tagline, though the facts are not yet in clear focus. Cohen has banked material for the statute of limitations argument and otherwise laid low.

Microsoft is off to a good start, but it won’t be able to lie very low as the case progresses. Microsoft was involved at very high levels throughout the fateful weekend in November 2023 when OpenAI’s nonprofit board of directors fired Altman, only to have Altman return a few days later and the board members most responsible for the firing forced to resign.

What the prediction markets have to say

On Thursday, April 23, four days before the Monday when jury selection began, the odds on the question “Will Elon Musk win his case against Sam Altman” were 35% on Polymarket. For a similar bet at the same time on the Kalshi prediction market, Musk’s odds of winning were 40%. Between the two sites a total of roughly $483,000 had been wagered.

On Friday morning, after the close of testimony for the week, the odds for Musk winning had changed to 33% and 50% respectively, and the aggregate amount wagered had grown to $723,000.

Reading too much — or indeed anything — into betting odds on the prediction markets would be unwise. The pool of money wagered on the questions is relatively modest, and there is no information about who wagered it, nor what their motivations might be beyond winning their bets. Prediction markets are relatively new, and how sophisticated players can use them to influence events or public opinion is far from fully explored.

Coming events

Next week will begin with the Musk team presenting testimony from Brockman, one of the founders, and Stuart Russell, a UC Berkeley professor focusing on AI safety. While the judge does not require the parties to announce the sequence of their witnesses more than a trial day in advance, the video deposition testimony of Tasha McCauley and/or Helen Toner, the former board members of OpenAI who voted to dismiss Altman as CEO, is also in the wings.

Readers can follow our day-to-day coverage of the trial Mondays to Thursdays as well as our weekly analysis and wrap-ups at the same place.